The recovery from the 2008 economic recession has been a slow one with real estate being perhaps one of the hardest hit industries during the recession. In Florida, investors in all asset classes are feeling uncertain about rising costs of rental rates and projected interest rates adversely affecting cap (capitalization) rates.

Ryan Severino joins us this week to discuss the recovery from the recession and its effect on real estate investment. As a senior economist and Director of Research at REIS, one of the nation’s leading real estate data providors, Ryan can provide expert insight on national recovery and how it translates to a state level. He also clears up the uncertainty over cap rates, interest rates & asset classes in Florida real estate.

In 2008, U.S. experienced deep balance sheet recession

Excess debt built up in national economy

Flow of credit ceased

Slow recovery period

2-2.5% GDP growth rate annually(next several years)

Class A inventories on rise, B & C inventories diminishing

Results in top-of-market rental rates in all asset classes

Southeast FL markets experienced above average recovery

Supported by foreign investment

Rents rising quicker than income recovery

Miami, Ft. Lauderdale becoming unaffordable markets

Central, Northeast FL markets still generally affordable

Multi-Family properties becoming much more competitive

Cap rate compression beginning to plateau

Commercial properties experiencing early-stage recovery

Room for cap rate compression

Cap Rates not effected solely by interest rates

Tied more closely to economic recovery

NOI (net operating income) effects cap rates

Ryan’s Tips:

Real Estate is a cyclical investment market

Follow proven market trends

For more information and research data on a variety of asset classes, visit the REIS website here